Categorized | Currency, Trade Agreements

House letter on Currency

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInShare on RedditDigg thisShare on StumbleUponBuffer this pagePin on PinterestShare on TumblrEmail this to someone

I can’t believe we didn’t post this at the time.  Below is the House letter telling Obama that the Trans Pacific Partnership must have effective currency regime within it.  A majority of the House signed it.

Zombie

We at CPA have been delivering this message… even under the most optimistic assumptions of TPP benefit, it mathematically cannot be worth passing without including currency.

Japan’s average tariff on U.S. goods is 2-3%.  The yen has devalued as much as 30% in the last six months.  So…. let’s do the math.  Exchange a possible 2.5% tariff benefit but get whacked by a 30% currency tariff?

Well… the “gross export zombies” may like it.  But it doesn’t make sense.  Because net trade matters, not gross exports. (Click here to see all 13 of our 21st Century Trade Agreement Principles).

Below is the June 6, 2013 press release from Rep. Michaud’s website.

******

WASHINGTON, DC – Today, 230 House lawmakers sent a bipartisan letter to President Obama urging him to address currency manipulation as negotiations over the Trans-Pacific Partnership (TPP) continue. The letter was led by Representatives Mike Michaud (D-Maine), John D. Dingell (D-Michigan), Sam Graves (R-Missouri), and Rick Crawford (R-Arkansas).

“Over the last couple years I’ve been in countless meetings with USTR and Treasury pressing them to include meaningful currency provisions in our trade agreements,” said Michaud. “To date they have done nothing. I’m hopeful this strong bipartisan letter convinces them to finally take action. American jobs are at stake.”

“Japan has a well-documented history of manipulating the value of the yen to help its exporters,” said Dingell. “We cannot allow this practice to continue if Japan is to enjoy the benefits of free trade with the United States. Strong and enforceable currency manipulation provisions must be included in TPP in order to prevent Japan from continuing in this market-distorting and unfair practice. I am proud to join with 229 of my Democratic and Republican colleagues in signing this letter and very much hope the Administration will take its message seriously.”

The full text of the letter sent to President Obama today can be found below:

June 6, 2013

President Barack Obama
The White House
Washington, D.C. 20500

Dear President Obama:

As the United States continues to negotiate the Trans-Pacific Partnership, it is imperative that the agreement address currency manipulation. Exchange rates strongly influence trade flows, and, in recent years, currency manipulation has contributed to the U.S. trade deficit and cost us American jobs. Incorporating currency provisions in the agreement will strengthen our ability to combat these unfair trade practices and help to create a level playing field for American workers, businesses, and farmers.

Undervalued exchange rates allow other countries to boost exports of their products and to impede exports of ours. They also contribute to trade imbalances and market access limitations that make it difficult for U.S. companies to compete in foreign countries. According to the Peterson Institute for International Economics, a minimum of one million American jobs have been shipped overseas as a result of currency manipulation alone. The consequences are not singular to the U.S.; misaligned currencies are distorting the entire global economy.

Despite U.S. efforts to address currency manipulation at the G-20, major currencies remain significantly undervalued. Including currency disciplines in the TPP is consistent with and will bolster our ongoing efforts to respond to these trade-distorting policies. It will also raise TPP to the 21st century agreement standard set by the Administration. More importantly, it will create a level playing field for American businesses and workers and prevent more U.S. jobs from being shipped overseas.

Thank you for your consideration of this letter. We look forward to working with you to address undervalued exchange rates in the TPP agreement.

Sincerely,

Signers: Michaud, Dingell, Graves, Crawford, Aderholt, Andrews, Barber, Barletta, Barrow, Barton, Bass, Beatty, Becerra, Benishek, Bentivolio, Bera, Bishop, Rob, Bishop, Sanford, Bishop, Tim, Blumenauer, Bonamici, Brady, Robert, Braley, Brooks, Mo, Brooks, Susan, Brown, Corrine, Brownley, Burgess, Bustos, Butterfield, Capps, Capuano, Cárdenas, Carney, Carson, Cartwright, Castor, Chu, Cicilline, Clarke, Clay, Cleaver, Clyburn, Coble, Cohen, Collins, Chris, Connolly, Conyers, Cooper, Courtney, Crowley, Cummings, Davis, Danny, Davis, Rodney, Davis, Susan, DeFazio, DeGette, Delaney, DeLauro, DelBene, Deutch, Doggett, Doyle, Duckworth, Edwards, Ellison, Engel, Enyart, Eshoo, Esty, Farr, Fattah, Fitzpatrick, Fortenberry, Foster, Frankel, Fudge, Gabbard, Gallego, Garamendi, Gibson, Grayson, Green, Al, Green, Gene, Griffith, Morgan, Grijalva, Grimm, Gutierrez, Hahn, Harper, Hastings, Alcee, Heck, Denny, Higgins, Himes, Holt, Horsford, Huizenga, Hunter, Israel, Jackson Lee, Jeffries, Johnson, Bill, Johnson, Eddie Bernice, Johnson, Hank, Jones, Joyce, Kaptur, Keating, Kelly, Robin, Kennedy, Kildee, Kilmer, Kinzinger, Kirkpatrick, Kuster, Langevin, Larsen, Larson, Lee, Barbara, Levin, Lewis, John, Lipinski, LoBiondo, Loebsack, Lowenthal, Lowey, Lujan, Ben Ray, Lujan Grisham, Lummis, Lynch, Maffei, Maloney, Carolyn, Maloney, Sean Patrick, Marino, Markey, Matheson, Matsui, McCarthy, Carolyn, McCollum, McDermott, McGovern, McHenry, McIntyre, McKinley, McLeod, McNerney, Meehan, Meng, Miller, Candice, Miller, George, Moore, Gwen, Murphy, Patrick, Murphy, Tim, Nadler, Napolitano, Neal, Nolan, Norton, O’Rourke, Owens, Pallone, Pascrell, Pastor, Payne, Perlmutter, Peters, Gary, Peters, Scott, Peterson, Petri, Pingree, Pittenger, Pocan, Price, David, Quigley, Rahall, Rangel, Rogers, Mike (MI), Roybal-Allard, Ruiz, Runyan, Ruppersberger, Rush, Ryan, Tim, Sanchez, Linda, Sanchez, Loretta, Sarbanes, Schakowsky, Schiff, Schneider, Schrader, Schwartz, Scott, David, Scott, Bobby, Serrano, Sewell, Shea Porter, Sherman, Shimkus, Sinema, Sires, Slaughter, Smith, Adam, Smith, Lamar, Speier, Stutzman, Swalwell, Takano, Terry, Thompson, Bennie, Thompson, Glenn, Tierney, Titus, Tonko, Tsongas, Upton, Van Hollen, Vargas, Veasey, Visclosky, Walberg, Walz, Watt, Waxman, Welch, Whitfield, Wilson, Frederica, Wilson, Joe, Yarmuth, Yoder, Young, Don

2 Responses to “House letter on Currency”

  1. W. Raymond M ills says:

    I welcome this note to Obama but also see in it a tendency for legislators to want somebody else to do something.

    Where is the pledge to the President of what they will do if the proposed agreement does not effectively end currency manipulation?

    I suppose I should be grateful for this small movement in the right direction.

    Instead, I am looking for a fighter to stand and defend the more important point that trade policy in the U.S. must make a right angle turn towards reduction in imports by action of the U.S. congress. NO MORE TRADE AGREEMENTS SEEKING TO EXPAND WORLD TRADE.

  2. Thomas Crumm says:

    Another article for my book tour, which is going well. Faculty members and local leaders often challenge my presentation in disbelief that currency and trade policy could have such an affect on the ability of their local industries to compete with imports. It is nice to have articles from CPA and Economy in crisis to hand out. They sway the crowd, providing support for my message. Thank you for your efforts.

Trackbacks/Pingbacks


Friends Don’t Let Friends Buy Imports

Sign up to receive periodic updates

Frequency